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Thursday 27 October 2016

*Hot Buy: Breaking News*:

_Quantum Jump Q2: JKPaper_

JKPaper set to announce Fabulous nos  for Q2 on 27th October:

*For Q2, denofwealth estimates JKPaper to report whopping 145% rise in NP YoY and 90% rise QoQ*

_Q2 NP can be 48 crores vs 19.81cr vs 26.66 cr_

JKPaper has emerged amongst leading paper companies in India and is set for rerating

TP Rs 121

Saturday 22 October 2016

Highest Dividend Yield Likely

*Shipping Corpn of India*

1) Equity.                465Cr
2) _NetWorth.      7083Cr_
3) PAT FY16.          377Cr
4)OneTime Exp.    135Cr
    In FY16
_5)CASH IN HAND1250Cr_
6) Equity with GOI.   65%
7) Equity with MF.     20%
8) FIT.                            3%
9) Public.                    12%
10) Baltic freight Index up from 290 to 800
11) New MD from Pvt sector
*12) As per DPE guidelines, Co should declare Dividend 5% of Network or 30% of NP whichever is Higher. It means SCI will have to pay Dividend of Rs 7 per share for FY17*

At CMP, Div yield 10%

Interim Div of Rs 2 likely with Q2

52week high Rs 100

In last 2 weeks, shipping stock like Essar have risen 50%.

SCI TP 85-90

Friday 21 October 2016

Peer Comparison:

_Nahar Industrial Enterprises vs Sangam_

Both companies have 40 Cr Equity although Sales of NIEL higher

              Sales.   Mkt cap

Sangam. 1511.   1233

NIEL.         1775.    480

Sangam is trading @ .8xSales

NIEL is trading @.27xSales

Lowest valuation of NIEL in textile space

TP 160-170 by Nov16
Long term tgt Rs 350-450
Hind Aluminium Ind Ltd:

_Proxy for booming Power sector_

CMP 125. TP 250

HAIL , belonging to Mumbai based Associated group, is engaged in production of Aluminum & Alloy Conductors and aluminium Rods catering to Power Transmission & Distribution applications. Co has capacity to produce  30,000 tonnes Aluminum conductors and 45000 tonnes Aluminum Wire Rods

Its clients include PGIL Tata Steel JSW KEC Sterlite etc

Financials:

               Q1/FY17.  FY16

Sales.    160.            720

NP.         3.41.          9.01

Equity.    6.30

EPSRs.    5.41.       14.30

BValue.    118

HAIL had reported EPS of 14.30 for FY16 and paid 16% dividend

For Q1, co has performed well as NP rising 32% YoY to 3.41 cr. Q1 EPS is 5.41

               2016-17E

Sales.     680

NP.         10.50

EPSRs.   16.65

Current mktcap is less than 80 crores

_HAIL is tdg @ 7.50xFY17Eeps. If stock deserved moderate PERatio of 15, stock price should be Rs 250 in 12 months_

Wednesday 19 October 2016

Upgrading Sumeet Ind: TP Rs 120.        
_Interview of promoter_

         In Q2CFY , its revenue went up 20.4 percent by YoY to Rs 347.17 cr and profit was up 228 percent YoY to Rs 15.62 cr. Promoters who had sold around 5 percent stake earlier this year are expected to buy that back before December.  Volume is not increasing very fast as it has not added any new capacity. *Plant is running at 120 percent.* It is increasing quality, increasing production and increasing value added products. Hence the profit is increasing. Standalone profit last year was Rs 28 cr and in H1CFY, this is Rs 30 cr.... in half year we earned profit equal to last year. *Profit in CFY is expected to be around Rs 70 cr* against Rs 28 cr last year. _In the next one or two years, this can touch up to Rs 100 cr._ Planning to add some capacity. It has low debt of about Rs 150 cr as it has not expanded in since 2012. It plans to manage funds and in the next 1-2 years double the production  capacity.

OUR TAKE: Sumeet has emerged as extremely efficient mfr of yarns , reflecting directly in sharply enhanced margins
_Stock can be 120 in next 15-18 months_
Next Multi bagger in Paper Industry:

*Cosboard Industries Ltd*:

In booming paper industry Cosboard can be new winner. I am yet to prepare Buy Report.
Q1 PBDT was much superior. Q2 will be still better. Co has made presentation to some big investors whom mktmen follow blindly. 2-3 have already started buying as convinced about future outlook. Once their names come in shareholders list, there can be frenzied buying.
Promoter has promised to reduce debt significantly by March 2017.
Stock can at least double in coming months.
Buying _strongly recommended_
Another Multibagger Idea:      

_TRIVENI GLASS LTD_

            Q1/FY17 Q1/FY16

Sales.      19.50.    14.70

NP.            2.50.       1.14

Equity.      12.62

EPS.           1.98.       0.89

Outlook:

                 FY17E.  FY18E

Sales.        80.       90

NP.             11.    14.50

EPSRs.      8.70.  11.50

TGL is mfg Figured/Designer glasses used by Interior designers in Offices, Homes, Hotels for doors, partitions, aesthetic enhancement
For Q1 TGL reported 110% rise in NP. Earlier only 1 production line was operational. In Q1 TGL resumed prdn on 2nd line as well leading to sharp jump in financials.
_Actual holding of promoters is 30%+. Promoters have FROR to buy equity held by SASF. As and when this transaction takes place, promoter stake can rise to 40%+_

1) TGL had already finalised OTS with IDBI. And has started payments from internal accruals

2)TGL has 72 acres land in Allahabad. Has already recd  25 crores as advance payment against proposed sale of this land

3) Once co gets written confirmation of OTS from IDBI, co will have +ve  networth

_4)BIGGEST TRIGGER_
Upcoming capital city Amravati is just 75 km from TGL plant. And there is no other factory in 200 km radius. Hence, demand for TGL glasses will far outstrip its entire production. *It will provide strong pricing power to TGL and BIG jump in its margins*

Stock is tdg @ 2xFY18Eeps.  Mktcap just 28 cr.
Very tiny qty of promoter holding was physical. Same under dmat. Once dematting is done, stock will be out of T group.
TP 100+ in 2018

Top pick in Dark Horse category. Negligible downside but HUGE upside possible
Time to Buy Triveni Engineering:Record date to be announced soon
_TP 90 in 2 months_

1) Holds shares of Triveni Turbine *worth Rs 900 cr vs mktcap of Rs 1420cr*

2) Demerging Sugar &allied business , post which TEIL will have engineering biz and Triveni Industries Ltd (TIL) comprising 7 sugar factories, 105MW power and 160KLPD distillery would be listed. *Shareholders will get one share each of both companies*

3) Q1 PAT 49cr vs Loss of 89cr. Q1 Eps 1.88 vs -3.46

4) *SUGAR BUSINESS*: Unrealised profit of inventory  
as on 30th June is 187cr( only sugar, excluding distillery, power).
*FY17E EBIT 390CR, PBT 290CR, PAT 225CR. EPS 9*
Even if Sugar (TIL) gets PERatio of 8( prevailing industry is 10), TIL (sugar biz) should be Rs 60-62 in 3 months of listing

TEIL (engineering biz) should quote 30-35 in Nov16 ( will also have TTL shares worth Rs 35/ share).
*Triveni Turbine was listed @ 40. Similar rise expected in T Engg after demerger  as water div will have vertical growth and gear div will have bright future due to tie-up with GE*
_Q2 NP to rise 100%+ YoY_
Fabulous Q2:
_Sumeet Industries Ltd_

              Q2: FY17. FY16

Sales.            348.  289

PBT.            20.77. 5.13

PAT.            15.62.  4.76

EPS.              2.69.  0.82

For Q2, steep rise in profit margin as sales have risen 20.42%, But NP has jumped 228% to 15.69%. Coming quarters will be equally good or even better as new 4.8MW power plant has become operational.
We revise upwards our FY17 EPS estimate to Rs 8.50-9 and FY18 EPS est to Rs 12.

*Stock is still tdg @3xFY18Eeps, leaving scope for further rise

TP Rs 80 in 12 months

Friday 14 October 2016

Amongst Largest Textile Co but Most Undervalued:

_Nahar Industrial Enterprises Ltd_

*A) *Tdg @ 5.20xFY17Eeps and 4.55xFY18Eeps*

*B)Tdg @ 2.83xFY17ECEps and 2.70xFY18ECashEps*

C) *Q1 NP rose BY 400% YoY*

*D) Mktcap 450cr vs expected Cash Profit of 324 cr in FY17,18*

*E)Book Value Rs 155*

FINANCIAL:

                 Q1:FY17. FY16
                   Rs/Cr.    Rs/Cr
Sales.        470.        432
Dep.             17.        23.70
PAT.           19.74.      3.91
Equity.        39.84
*Eps              4.95.     0.98*

PROSPECTS:

                      FY17.  FY18

Sales.           1950.   2075

Dep                    72.       68

NP.                    86.        98

Cash Profit.     158.      166

*EPS.             21.60. 24.60*

Cash EPs.    39.65.   41.70

About NIEL:

271000 spindles
7832 Rotors
53MW power plant
2500 TCD sugar
112 million mtr  Fabric mfg capacity
Huge yarn dyeing: 13 TPD
Spread over 7 plants

Peer Comparison:

                    PERatio

Sangam.        15
KPR.                26
Nahar Spg.     11
*NIEL.             5.20*

Big scope for PERatio expansion

TP Rs 350 in 18 months
Sumeet likely to announce 125% rise in Q2 NP YoY on 17th. New power plant operational. With closing down of small factories in unorganized sector, Sumeet has bright prospects. We firmly believe stock to be 80 in 12-18 months
Acrylic fibre industry has started facing margin squeeze and demand has come down. Hence investors are advised to book profit in Pasupati Acrylic immediately
Post demerger potential of Triveni Engineering:
Investors may remember that Triveni Turbine was listed at 40 and then it's share price trebled

Once sugar div is demerged, we expect:

1. Demerged sugar div Triveni Industries Ltd to quote @ 60-65 ( in 3 months of listing) as demerged sugar div will report Eps of 9 for current year

2. After demerger, engineering div consisting of water and gear known as Triveni engineering should quote ( ex basis) @ 40. But can rise to 100+ in 18 months as water div NOW gtg huge orders n mgtmnt expecting 30% CAGR

_Investors can now buy Triveni engineering. Sell Triveni Ind when it is listed post demerger. Thus shares of Triveni engineering post demerger will be ABSOLUTELY FREE_

Friday 7 October 2016

Edelweiss Buy on- Tourism Finance Corporation of India Ltd


Loan book to grow at healthy rate: We expect TFCI to report healthy credit growth as fresh capex is expected in the tourism industry. Hotel industry reported 3.9% supply growth while demand increased by 10.5% in FY16, which resulted in a significant jump in occupancy rate to 67-68%. Increasing occupancy level will create demand for new hotel in next two years. We expect 25% loan growth over FY16-18E on back of strong demand for new hotels. We believe the diversification of loan book will provide the stability in long term.Asset quality to improve: Company reported a very healthy asset quality between FY08 and FY15 but in FY16 asset quality deteriorated significantly. The absolute gross non-performing asset (GNPA) of the TFCI was INR 159 crore by March 2016. In Q1FY17, company recovered INR 20 crore and we expect INR 30-35 crore recovery/resolution/up-gradation in Q2FY17 and INR 100 crore recovery/up-gradation/resolution by the March 17, translating outstanding GNPA to INR 55-60 crore by March 2017.Healthy sanctions & disbursement: TFCI reported an average of INR 697 crore sanctions and INR 462 crore disbursements over FY12-16. During the H1FY17, the total sanctions and disbursement stood at INR 1000 crore and INR 600 crore. We expect 50% and 60% growth in sanctions and disbursement over FY16-18 to INR 1,442 crore and INR 973 crore respectively.Margin is expected to remain under pressure:TFCI has been reporting a very healthy NIM as interest outflow is slightly lower due to lower leverage. We believe the incremental disbursement will increase the leverage which will have the marginal impact on the net interest margin (NIM). Currently TFCI’s NIM stood at 5.78% which is expected to fall by 49 bps over FY16-18 to 5.29%.RoE to improve: Gradual decline in leveraging ratio and healthy advance growth is likely to boost the profitability. Company has been reporting slightly low RoE due to high equity. We expect net profit to report 16% CAGR over FY16-18E to INR 72 crore in FY18. Currently TFCI is reporting 10.8% RoE, which is expected to improve to 12.33% in next two years.

In FY16, hotel industry reported 3.9% supply growth while demand growth was 10.5%, which resulted in a significant jump in occupancy rate to 67-68%. We expect fresh capacity addition requires in next two years. Considering the initiatives of central Govt. such as ‘Make in India, Smart-cities, Ease of Doing business and Digital India, we believe demand for hotel room will increase substantially.

At CMP of INR 66 per share, stock is trading at 0.9x FY17 adjusted book value (ABV) and 0.8x FY18 ABV. We believe the healthy credit growth and incremental capital borrowing from money market will enhance the profitability. Hence we have a positive outlook.

Wednesday 5 October 2016

AXTEL INDUSTRIES LTD:

*An Engineering co available  for peanuts*

Q4 FY16 Sales 32 cr vs 21 cr in corresponding period of previous year (50% rise)

Q4 PAT 6.73 cr vs 1.63 cr in corresponding period of previous year(up 400%)

Normally, Q4 of AIL is peak quarter

FY16 Sales 67 cr vs 40 cr in FY15

FY16 PAT 4.80cr vs 7.54cr LOSS in FY15

AIL is engaged in production and marketing of processing
equipments/machineries for FOOD PROCESSING and PHARMA Industry.
Hence, has huge growth potential.

*Q1FY17 Sales 14.50 vs 6.67cr*
*Q1 NP 2.06cr vs Loss 3.77cr*

FY17E Sales 90 cr    PAT 11.50 cr

FY18E   Sales   130 cr  PAT  18 cr

Stock can be in 3 digits in next  6 months. investors who can hold the
stock for 12-36 months should try to buy for big big appreciation.  An
engineering company (with clientele in highest growth industry of food
and pharma) available at market cap of just 100 crores.
_Barring unforeseen, AIL can be Rs 200 in 15-24 months_